Foraminifera and Mollusca collected from the phosphatic Pungo River Formation and the overlying Yorktown Formation in eastern North Carolina were analyzed and interpreted for stratigraphic and environmental significance in order to determine optimum depositional sites for primary phosphorite. The Mollusca and benthonic foraminifera of the Pungo River Formation correlate with those of the Calvert Formation of Maryland, and the planktonic foraminifera in both of these formations correlate with the Globigerinatella insueta zone of Trinidad, postulated as late Aquitanian age. The paleoenvironment of the phosphorite deposition, interpreted primarily from the benthonic foraminifera, was of cool-temperate waters, ranging in depth from 100 to 200 m in the phosphatic beds to less than 70 m in the upper calcareous beds where phosphate is scarce. Phosphorite deposition occurred in an oceanic embayment located south of the Fort Monroe high in southern Virginia and north of a positive feature whose axis lies in the vicinity of New Bern, North Carolina. Cool-temperate waters in this area during Pungo River time indicate that circulation patterns of ocean currents and the resultant faunal provinces were not the same as those at present and later in the Miocene. In the Pungo River and its time equivalents of the Atlantic Coastal Plain, the presence of thick diatomaceous clay units, volcanic ash beds, shards, attapulgite clays, and other minerals probably derived from volcanic rocks, suggests a volcanic source somewhere off the coast during the Miocene. The Yorktown unconformably overlies the Pungo River Formation. The unconformity is marked by channels into the Pungo River, filled with phosphatic pebbles, vertebrate bones, and lower York-town molluscs and microfauna. The coarse-grained phosphatic material is derived from the underlying fine-grained primary phosphorite in the Pungo River and is abundant only in the lower part of the Yorktown Formation. Deposition of the lower part of the Yorktown occurred in waters about 100 m deep. The waters gradually became more shallow as deposition of the formation continued until depths of less than 15 m, and probable brackish conditions, were reached as the uppermost part of the formation was deposited. Temperature of the waters, cool-temperate during lower Yorktown deposition, became warm-temperate to subtropical in later Yorktown time. The faunal patterns suggest that circulation patterns reached their present state during late Yorktown time.